Why Peak Import Season Arriving Early Matters
Peak Import Season is already here. Typically this season runs August through October, but many supply chains have accelerated orders to get product in the pipeline early. This, on top of historic demand and capacity imbalance, port congestion, dray equipment availability and labor shortage, has led to spiking ocean freight rates.
(Spot) ocean rates are on pace to increase 50% with lengthening door-to-door transit times. The net result is record profits for maritime operators. (Controlling your supply chain is more important now than ever. Check out our seven simple rules to supply chain success here.)
Without sea freight, the world’s economy would come to a screeching halt – there would be no electronic products, manufacturers would have no raw materials, and store shelves would be half empty. Even though we live in a digital world, it is the massive flow of goods crossing our oceans that keeps global commerce’s engine running.
Put simply, ocean freight is the transport of goods, raw materials, and commodities via the world’s oceans and waterways. The overwhelming majority of everything that is sold anywhere around the globe likely got there, at least part-way, on a ship. (See our basic guide to ocean shipping here.)
If you are importing, there are a few steps you can take to optimize your supply chain and reduce costs. Mostly, this involves readjusting expectations but there are some practical steps, too.
First, start shipments as early as possible. Next, be sure to adjust expectations for transit time. Lastly, expect to pay more. As long as maritime operators remain disciplined on offering capacity, the only path to lower rates and improved transit is reduced demand…and nobody wants that either!
Also, make sure you are insured! Cargo claims are inevitable, which is why freight insurance is so important. Studies estimate that as much as 30% of losses during transit are unavoidable and relying on the Freight Carriers legal liability may not be adequate. This is why insurance should be considered for all freight shipments.
To learn more, contact our team today!